On the performance of the Chow-Lin procedure for quarterly interpolation of annual data: Some Monte-Carlo analysis

Most of the countries of the OECD offer quarterly estimates of their national growth or of their Gross National Product. Official Statistical Agencies in western countries have to deal with the problem of estimating Quarterly National Accounts series congruently with Annual National Accounts. In Spain, the Instituto Nacional de Estadística uses the Chow-Lin disaggregation method, which is based on information provided by a group of high-frequency related variables, to estimate the quarterly components of National Accounts from annual components. In this paper, we analyse the relative quality of the estimates obtained through the Chow-Lin procedure, under different sets of hypotheses.JEL Classification: C15, C43, M40We are grateful to Maria Amparo Ripoll for her assistance. The authors also wish to thank three anonymous referees and an editor for their constructive suggestions and comments. This research was partially made during the stay of the first author at the Universidad Carlos III de Madrid. It has been partially supported by the research project DGCYT PB98-1460.     

Impact of RFID information-sharing strategies on a decentralized supply chain with reverse logistics operations

The integration of environmental practices in a supply chain has been study for the past few decades. However, most of the work relies on centralized decisions made by one player. Few papers address the complex dynamics of environmental decentralized supply chains and how these dynamics can affect environmental and economic outcomes. To study this problem, we consider a supply chain with a manufacturer and two different suppliers: a recycled-material and a raw-material supplier. The players make individual inventory decisions to satisfy demand and reduce cost. Further, this supply chain encompasses stochastic elements such as in demands, returns, and collection leadtimes. These decentralized decisions and random factors can cause underperforming results; therefore, new inventory models and technologies are needed to help companies increase coordination within these systems. We model the implementation of Radio Frequency Identification (RFID) in the supply chain to determine if real-time inventory monitoring and information sharing can help the system attain higher environmental benefits (more returns) and higher economic benefits (less cost). We study two scenarios through a simulation-based analysis: No RFID and RFID. Numerical studies show that environmental benefits are significantly increased with the attainment of more returns. However, although economic benefits are realized, they are less significant than the environmental benefits. Further regression and sensitivity analyses on the cost performance measures reveal that economic benefits depend on several drivers inside the system. We present managerial insights that illustrate what configurations within this complex system can lead to the achieving of environmental as well as economic benefits.     

National levels of corruption and foreign direct investment

We model the relationship between bilateral foreign direct investment (FDI) and the level of corruption in multinational firms’ (MCNs’) home and host countries. We construct and test a model of bilateral FDI between countries that differ in their levels of corruption. FDI is affected negatively both by the level of corruption in the host country and by differences in home- and host-country corruption. Our model emphasizes that MNCs develop skills for dealing with home-country corruption, and these skills become a competitive advantage in similarly corrupt host countries. We test the model using data on bilateral FDI stocks among a large number of home and host countries, using a variety of specifications and estimation strategies to provide robustness. Our results show that the effects of host-country corruption and of differences in corruption levels between home and host countries are statistically and economically significant.     

The dynamics of parallel economies. Measuring the informal sector in Mexico

The existence of parallel economies that operate in the shadows of informality within most Latin American countries is widely recognized by the economic literature. However, its composition, size and effects on economic growth are still open questions. In this paper, we estimate the size and the evolution of the Mexican informal economy in the last three decades using a vector error correction model. In addition to the standard explanatory variables traditionally used in the currency demand approach, we include remittances given their relevance in the Mexican economic system. The results indicate that informality prior to the late 1980s accounted for at least two thirds of GDP, while stabilizing around one third of GDP in the last decade. Furthermore, our estimates provide evidence of a positive long-run relationship between informality and economic growth.     

Building internal business scenarios based on real data from a performance measurement system

This paper presents a new methodology to build internal business scenarios from the data gathered by some key performance indicators (KPIs) defined within a performance measurement system. The application of the principal components analysis technique leads to the identification of latent relationships between KPIs that underlies some important business aspects. Further, this methodology allows to represent not only the temporal evolution of the organisation as a function of these business aspects but also the definition and determination of internal business scenarios, being therefore the source of meaningful managerial information. At the end of the paper, results of a practical application are presented and discussed, as well as their importance for the organisation from a decision making point of view.     

Insurance with Frequency Trading: A Dynamic Analysis of Efficient Insurance Markets

This paper extends existing insurance results on the type of insurance contracts needed for insurance market efficiency to a dynamic setting. It introduces continuously open markets that allow for more efficient asset allocation. It also estimates the role of preferences and endowments in the classification of risks, which is done primarily in terms of the actuarial properties of the underlying risk process. The paper further extends insurability to include correlated and catastrophic events. Under these very general conditions the paper defines a condition that determines whether a small number of standard insurance contracts (together with aggregate assets) suffice to complete markets or one needs to introduce such assets as mutual insurance. Journal of Economic Literature Classification Numbers: D81, D99, G11.     

Differences in exchange rate pass-through in the euro area

This paper focuses on the pass-through of exchange rate changes into the prices of imports made by euro area countries originating outside the area. Using data on import unit values for 13 different product categories for each country, we estimate industry-specific rates of pass-through across and within countries for all euro members. In the short-run, pass-through rates differ across industries and countries and are less than one. In the long-run neither full pass-through nor equality of pass-through rates across industries and countries can be rejected. Differences exist across euro area countries in the degree that a common exchange rate movement gets transmitted into consumer prices and costs of production indices. Most of these differences in transmission rates are due to the distinct degree of openness of each country to non-euro area imports rather than to the heterogeneity in the structure of imports.     

Semiparametric Estimation of a Duration Model

Within the framework of the proportional hazard model proposed in Cox (1972), Han and Hausman (1990) consider the logarithm of the integrated baseline hazard function as constant in each time period. We, however, proposed an alternative semiparametric estimator of the parameters of the covariate part. The estimator is considered as semiparametric since no prespecified functional form for the error terms (or certain convolution) is needed. This estimator, proposed in Lewbel (2000) in another context, shows at least four advantages. The distribution of the latent variable error is unknown and may be related to the regressors. It takes into account censored observations, it allows for heterogeneity of unknown form and it is quite easy to implement since the estimator does not require numerical searches. Using the Spanish Labour Force Survey, we compare empirically the results of estimating several alternative models, basically on the estimator proposed in Han and Hausman (1990) and our semiparametric estimator.     

Does the quality of public-sponsored training programs matter? Evidence from bidding processes data

This paper analyzes the link between training quality and labor-market outcomes. Multiple proxies for training quality are identified from bidding processes in which public and private training institutions compete for limited public funding in Peru. Information about exact dates of program enrollment is analyzed to show whether the first-come-first-served assignment rule randomized eligible individuals across courses of varying quality. Generalized propensity score (GPS) is implemented to estimate dose–response functions in the context of multiple treatments. We find that beneficiaries attending high-quality training courses show higher earnings and better job-quality characteristics than either beneficiaries attending low-quality courses or nonparticipants. The returns are particularly robust for women, making the provision of high-quality training services cost-effective. Furthermore, the most important training attribute is expenditures per trainee. Class size and infrastructure are weakly related to the expected impacts, while teacher experience, curricular activities, and market knowledge seem to bear no relationship with the expected impacts. External validity was assessed by using five cohorts of individuals over an eight-year period.